In view of recent developments, it appears that the Government is set to meet the target of implementing the GST with effect from 1 April 2017. GST is not just a change in tax regime but a business transformation. Introduction of GST will necessitate review and change of tax positions, supply chain, ERP system, business processes and accounting, among others. If GST is introduced from 1 April 2017, the industry has very limited time to undertake such changes.

Furthermore, after the introduction of GST, it is expected that there is likely to be an increase in ongoing compliances. While increased compliances is likely to bring greater transparency and result in a positive impact on the economy, the industry will need to set in place appropriate processes and ERP systems in order to handle the change and be GST ready. The GST RNR should be reasonable for effective compliance and efficacy of the GST regime. There is also a need for a structured forum for discussions with industry stakeholders for finalizing draft GST laws.

The proposed Article 246A intends to grant concurrent powers to the Union and state legislatures to make laws with respect to GST. The power to make laws in respect of supplies in the course of inter-state trade or commerce will be vested only in the Union Government. States will have the right to levy GST on intra-state transactions including services.

Centre Government will levy Integrated GST (IGST) on inter-state supply of goods and services. On intra-state supply of goods and services, the Central Government will levy Central GST (CGST) while state Governments will levy State GST (SGST). Import of goods will be subject to basic customs duty and IGST.

GST is defined as any tax on supply of goods and services other than on alcohol for human consumption. Central taxes such as, Central Excise duty, Additional Excise duty, Service tax, Additional Custom duty and Special Additional duty, Central Sales tax as well as state-level taxes such as, VAT or sales tax, Entertainment tax, Entry tax, Purchase tax, Luxury tax and Octroi will be subsumed in GST.

Petroleum and petroleum products will be subject to GST on a date to be notified by the GST Council. Alcohol for human consumption will be out of GST; states will continue to levy taxes on alcohol. Tobacco products will be subjected to separate Excise Duty by the Centre over and above GST.

There is a provision to remove imposition of entry tax/Octroi across India. Entertainment tax, imposed by states on movie, theatre, etc., will be subsumed in GST, but taxes on entertainment at panchayat, municipality or district level will continue.

GST is likely to be levied on the sale of newspapers and advertisements and this will give the Government access to substantial incremental revenues. Stamp duties, typically imposed on legal agreements by the state, will continue to be levied by the states. Article 279 provides the constitution of GST Council by the president within 60 days from the date of the passing of the Bill and also provides for the appointment of members of the GST Council and its composition and powers to make recommendation.

Administration of GST will be the responsibility of the GST Council, which will be the apex policy-making body for GST. Members of the GST Council are Central and State ministers in charge of the finance portfolio. In the GST Council, the Centre will have a one-third vote and all states combined will have two-third vote. Quorum for GST Council is 50% of total members and for majority of Council decisions 75% of the weighted votes of the members present and voting.